The last surviving Brown Derby restaurant building, which dodged the wrecking ball in the mid-2000s, has been sold for $9.25 million to local investors.

The domed structure at Los Feliz Boulevard and Hillhurst Avenue in Los Angeles was the fourth Brown Derby, a small restaurant chain popular with the entertainment industry in Hollywood's Golden Age.

The sellers, a group led by Adler Realty Investments Inc. of Woodland Hills, had let go of their plans to raze the building and build a five-story condominium and retail complex. Neighbors objected to the potential loss of the landmark and worried about increased traffic at the busy intersection.

With the support of public officials, the former Brown Derby property was declared a historic landmark, in effect killing the development — and providing an unexpected break for the would-be developers.

"We would have finished right when the condo market was in the tank," said real estate broker John Battle of Lee & Associates, one of the sellers. The project might well have been foreclosed upon, he said, a fate suffered by many condo developments in that period.

The property has been altered numerous times since it opened in 1929 as a Willard's chicken restaurant. In 1941, it was purchased by legendary director Cecil B. DeMille. He opened the Brown Derby fine dining and 24-hour car service, in keeping with the drive-in restaurant fad of the era.

From the 1960s to the early 1990s, the Brown Derby location was home to Michael's Los Feliz restaurant. It was occupied most recently by a branch of Louise's Trattoria. The owners of Louise's closed it recently — they will reopen the space next month, in conjunction with restaurateur Bill Chait, as a new eatery called MessHall.

A Chase Bank branch took over the domed portion of the former Brown Derby, preserving the arching wooden ceiling that was a key element of a primitive air conditioning system that allowed water to drip down the sides of the dome and cool the room.

The new owner is CMC Asset Investments Inc., a company owned by the Chu family of Los Feliz, which will operate the property as it is, Battle said. Attorney James Chu represented the family in the transaction.

Apartment construction may wane in 2014

The apartment construction boom sweeping Southern California and other parts of the country has about two more years to go before playing itself out, a new UCLA report said.

Developers are responding to the collapse of the single-family housing market in the recent economic downturn. It prompted increased demand for rental units as some homeowners lost their property and potential buyers retreated from the volatile market.

Many investors perceive apartments as a safe, potentially lucrative investment, said the report from the UCLA Ziman Center for Real Estate. With 10-year Treasury bond yields below 2%, institutional investors are seeking higher-yielding alternatives. Climbing rents offer the prospect of higher future income and capital appreciation.

"Of course this boom in multifamily construction will have within it the seeds of its own destruction," UCLA economist David Shulman said. "As rents rise, consumers will shift out of rental into ownership units."

By 2014, supply will begin to outpace demand, the report said. Competition will include existing single-family homes that are being turned into rental properties by a growing number of investment groups. As the costs of buying and renting come closer to each other, more people will opt to own their residences.

"The American dream of home ownership may be comatose, but it is not dead," Shulman said, "and the wake-up call will come in the form of higher rents."